FCC's direct-to-cell proposal appears to favor T-Mobile over AT&T

The FCC released the details of its direct-to-cell proposal, and according to some industry executives, the agency's rules appear to favor T-Mobile's partner SpaceX over AT&T's partner AST SpaceMobile.

"SpaceX is clearly in the lead and should be able to comply with these requirements, while AST has made less progress and will have more difficulty meeting these requirements," analyst Tim Farrar with TMF Associates wrote in response to questions from Light Reading.

However, Farrar noted that the FCC's 160-page proposal (PDF) makes concessions to both SpaceX and AST SpaceMobile on different elements.

'Broadband from space'

AST SpaceMobile cheered the FCC's proposal in a post to social media. "The detailed ruling ... includes frequencies key for AST SpaceMobile: 600, 700, & 800 Mhz," the company wrote, noting that it "applauds" the FCC's proposed rules. "This paves the way for direct cellular broadband from space using everyday smartphones," the company added.

Even so, AST SpaceMobile's shares continued their downward trend after the release of the FCC's proposal.

Farrar also explained that the FCC's new proposal appears designed to also consider direct-to-cell applications on a waiver basis. He said AST SpaceMobile's waiver application seems to have moved much more slowly than SpaceX's application.

However, the FCC's proposed rules are not final. The Commission is scheduled to vote on them during its open meeting on March 14. Further, the FCC's work on direct-to-cell services remains in progress. For example, the FCC will seek further comment on how such services ought to work with 911 systems and how radio astronomy operations might be protected from direct-to-cell satellite constellations.

Heated lobbying

For months, the FCC has been considering rules for direct-to-cell services – dubbed by the agency as Supplemental Coverage from Space (SCS) and often called direct-to-device (D2D) by companies operating in the space. Companies like T-Mobile, SpaceX, AST SpaceMobile, Lynk Global, AT&T, Omnispace and others have been meeting with FCC officials to push for rules favorable to their respective businesses.

In a series of last-minute meetings, executives from SpaceX and AST SpaceMobile sparred over various direct-to-cell details. For example, a hot topic involved questions over whether the services would interfere with other wireless operations in nearby spectrum bands.

"AT&T is concerned about SpaceX' evolving claims regarding OOBE [out-of-band emissions] compliance," the operator wrote earlier this month.

"AT&T's ... suggestion to impose needlessly restrictive aggregate interference requirements would upset that balance and harm consumers," SpaceX responded.

"In terms of interference constraints, the FCC does impose a new PFD [power flux-density] limit on out of band emissions, which it describes as 'an equitable – and technologically feasible – middle ground between the positions expressed in the record'," Farrar explained to Light Reading after reading the FCC's newly proposed SCS rules.

"In other words, it will not be as liberal as allowing full terrestrial power levels, but not as restrictive as existing MSS [mobile-satellite service] power levels," he added. "Nevertheless, this limit may restrict the overall power of SCS operations and thus the service quality delivered (such as the data rates, and degree of building and foliage penetration)."

MSS providers include Globalstar, which is powering the satellite-based emergency messaging services on Apple's newer iPhones.

Next steps

If the FCC votes to implement its proposed rules, the next step would be for SpaceX/T-Mobile and AST SpaceMobile/AT&T to submit proposals to provide commercial D2D services. Such services could allow the operators' customers to connect their phones directly to SpaceX or AST SpaceMobile satellites in areas where terrestrial cellular services are unavailable.

But neither SpaceX nor AST SpaceMobile operates many of those kinds of satellites yet. Both companies have proposed to launch hundreds of them and have already been testing their D2D services on a handful of recently launched satellites.

SpaceX and AST SpaceMobile aren't the only D2D players. Others have proposed a variety of scenarios for phone-to-satellite connections.

For example, Particle said its new devices use technology from Qualcomm, Quectel and Skylo, alongside satellites from Viasat and Ligado, to add satellite connectivity next to Wi-Fi, cellular and LoRa options.

Separately, the Seamless Air Alliance (SAA) for inflight connectivity announced it intends to "enable future seamless connectivity between terrestrial and non-terrestrial satellite networks."

And Skylo said it has raised $37 million from investors including Intel Capital, Innovation Endeavors, BMW i Ventures, Samsung Catalyst and others to pursue its D2D satellite connectivity solutions.

Meanwhile, others are retooling their efforts. Iridium, for example, announced its Project Stardust effort after its D2D agreement with Qualcomm collapsed.

But some analysts aren't enthused.

"The loss of the Qualcomm relationship and the subsequent further progress from alternative satellite to device solutions also largely removes what we thought would be a sizable, longer-term opportunity for Iridium, that could accelerate growth. The opposite is happening. Growth is decelerating," wrote the financial analysts at LightShed Partners in their assessment of Iridium's latest earnings announcement.